Should you insure your smartphone?

by Michelle L on August 26, 2009

Anyone who has ever bought a cell phone, either online or in a retail store, is well aware of the upsell attempts that occur between the time when you pick out the phone you want and actually pay for it. If you’re buying online, before you get to the checkout page, you’ll have to click through several other pages offering additional features, lines, accessories, and the like. The same thing happens in the store, only it’s the salesperson droning through a litany of offers and questions before they’ll give you the damage and let you pay. Even when you’ve already decided on the phone and the accessories, there’s one offer you may want to give some real consideration to before turning it down out of hand—cell phone insurance.

When did cell phone retailers become insurance salespeople who, in the opinion of some, are only a small step above used car salesmen? Well, some more recently than others, but all four major carriers—Verizon, AT&T, T-Mobile, and Sprint—now offer cell phone insurance coverage. The real question is, do you need to insure your cell phone? No. But what about your smartphone? That may be worth looking into.

If all you have is a basic model cell phone for emergency purposes and the occasional call, chances are it didn’t cost you very much. You may have even gotten it for free when you signed up for a wireless plan. If this is the case, the insurance premiums would quickly add up to more than what you paid for the phone, and if you got a basic phone for little or not cost in the first place, doesn’t it stand to reason you could do the same if your phone were lost, damaged, or stolen? Probably.

But if you have a smartphone that cost a few hundred dollars, and may cost even more now than it did when you bought it, an insurance policy may be a smart move. Insurance is available from the major carriers with the following monthly premiums: $4.99 with AT&T; $5.99 with T-Mobile; $5.99 or $7.99 with Verizon, depending on the device; and $7.00 with Sprint for total equipment protection. Sprint also has a couple of lower cost options. All four carriers also have various deductibles, limits, and covered events.

After spending $200 to $500 on a smartphone, paying eight bucks a month plus an $89 deductible doesn’t sound like much to have the phone replaced if the dog makes it into a chew toy, or your toddler decides to see if it will float in the toilet. But before you sign up for insurance from your wireless carrier, check to make sure your phone isn’t covered by a policy you already have.

Homeowners policies don’t just cover the house, but usually have riders to cover the contents of the home so if there’s a fire or burglary, you can replace your belongings as well as get reimbursed for the damage to or loss of your home. Renters policies cover your belongings in a home or apartment you’re leasing, so if they’re damaged or stolen, you’re able to replace them. Check with your insurance company to see whether your smartphone will also be covered before you sign up for a policy offer from your wireless provider.

What if you’re away from home, whether on vacation or just at work, and you drop your phone, it’s stolen, or it has a wrestling match with a piece of machinery at the plant? If you have a valuable personal property rider on your homeowners or renters policy, chances are it covers your smartphone in addition to your watch and your engagement ring.

Before making any decisions, do your homework. Don’t let a salesperson scare you into buying something you don’t really need, but don’t turn it down without understanding what it offers, either. Whether or not you purchase smartphone insurance from your carrier basically comes down to three factors: Will the insurance cost more than the phone? Is your phone already covered by an existing policy? And can you afford to insure your phone? Depending on how much you paid for your phone, and how much it would cost to replace it, can you afford not to?

Filed under : Consumer Issues